Precious metals such as gold, silver, and platinum are valued by many investors as a hedge against inflation or a safe haven in times of economic turmoil. They also are valued for their rarity and their use in a broad range of industrial applications. Precious metals exchange-traded funds (ETFs) are a popular way to invest in these metals, either through physical or futures-based exposure. ETFs can offer a more liquid and easier approach to investing in precious metals than buying futures contracts, purchasing bullion, or buying stock in publicly traded companies involved in the exploration or production of these metals.

Key Takeaways

  • The precious metals market has dramatically underperformed the broad U.S. equity market over the past year.
  • The ETFs with the best 1-year trailing total return are SIVR, SLV, and PPLT.
  • Two of the top precious metals ETFs hold silver while the third is invested in platinum.

The universe of precious metals ETFs that trade in the U.S. is comprised of 14 funds, excluding inverse and leveraged ETFs, as well as funds with less than $50 million in assets under management (AUM). These ETFs are invested in physical precious metals rather than the shares of precious metals mining companies. The benchmark S&P GSCI Precious Metals Index has significantly underperformed the broader market with a total return of 7.2% over the past 12 months, well below the S&P 500's total return of 48.7%, as of May 14, 2021. The top precious metals ETF based on performance over the past year is the Aberdeen Standard Physical Silver Shares ETF (SIVR). We examine the 3 best precious metals ETFs below. All numbers below are as of May 17, 2021.

Aberdeen Standard Physical Silver Shares ETF (SIVR)

  • Performance over 1-Year: 71.9%
  • Expense Ratio: 0.30%
  • Annual Dividend Yield: N/A
  • 3-Month Average Daily Volume: 733,666
  • Assets Under Management: $1.1 billion
  • Inception Date: July 24, 2009
  • Issuer: Standard Life Aberdeen

SIVR is structured as a grantor trust, offering investors a certain degree of tax protection. The ETF's holdings are 100% silver bullion and it tracks the price of silver without any of the potential complexities associated with silver futures contracts, such as contango or backwardation. As such, the ETF offers investors a simple way to invest in silver without having to worry about the storage or insurance costs of holding physical metal, or with the complexities involved in trading futures contracts. SIVR's silver bullion is stored in a vault in London, U.K., and its holdings are inspected twice per year by a third-party firm.

iShares Silver Trust (SLV)

  • Performance over 1-Year: 71.9%
  • Expense Ratio: 0.50%
  • Annual Dividend Yield: N/A
  • 3-Month Average Daily Volume: 26,878,128
  • Assets Under Management: $15.6 billion
  • Inception Date: April 28, 2006
  • Issuer: BlackRock Financial Management

Like SIVR, SLV also is structured as a grantor trust, providing some tax protection for investors. The fund is 100% physically-backed by silver bullion and seeks to track the price of silver. Its physical silver is held in vaults located in London and New York. SLV enables investors to benefit from the appreciation in the price of silver without the costs associated with holding the physical metal and without being concerned with the complexities of investing in silver futures. While it is similar in many ways to SIVR, SLV has a much higher expense ratio.

Aberdeen Standard Physical Platinum Shares ETF (PPLT)

  • Performance over 1-Year: 58.0%
  • Expense Ratio: 0.60%
  • Annual Dividend Yield: N/A
  • 3-Month Average Daily Volume: 200,003
  • Assets Under Management: $1.6 billion
  • Inception Date: Jan. 6, 2010
  • Issuer: Standard Life Aberdeen

PPLT is also a grantor trust, though unlike the funds above, it tracks the spot price of platinum bullion. Platinum is a difficult precious metal for investors to access, and PPLT is one of the only options for platinum exposure aside from futures contracts, individual platinum coins, and shares of platinum mining companies. PPLT's platinum bullion is stored in vaults in London and Zurich. The metal is held in allocated bars and the bar list is posted daily.

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